5. Suppose the inventory manager at the ABC company is concerned about combined variability in sales and lead time for one of its line of products and has provided you with the following sales data:

Mean Sales = 20 units, with a standard deviation of 3.0

Mean Leadtime = 10 days, with a standard deviation of 2.0

The manager plans to order on the basis of EOQ. Assume EOQ = 300 units

What is the standard deviation of safety stock for ABC's line of products (Note: you may use the convoluted formula for this question)

a. Approximately 1690 units

b. approximately 60 units

c. approximately 40 units

d. 110 units

6. Given the information in question 5 above, and assuming that ABC wants to keep 4 days of sales in the safety stock, the safety stock factor under this policy is 1.6. True/False

7. Given the information in questions 5 and 6, what is the fill rate under this new inventory policy

a. Under 98%

b. Over 98%

8. Given the information in questions 5 and 6, what is the Low's reorder point under uncertainty

a. significantly more than 240 units

b.approximately 240 units

c. significantly less than 240 units

9. Given the information in questions 6 and 7, ABC average inventory will be approxamtley 150 units. True/False